How to write an RFI for e-invoicing – part 2 – Preparing the RFI

You and your objectives

Start by preparing a brief for the potential vendors. This should describe your organization and the AP landscape (numbers of invoices etc) and, importantly, your business objective. The “implementation of e-invoicing” isn’t an objective – that is a means to achieving your objective. Your objective could be “to save money by reducing headcount in AP” or “to improve our carbon footprint by reducing the number of paper invoices we receive”

What you need to know about the vendors

You need to understand the relative strengths of the vendors you approach. The weighting you apply will be determined by your particular circumstances. This list is by no means exhaustive and not all of it will be relevant.

About the company – In addition to standard questions about their financial strength, numbers of customers etc, understand their likely longevity. What is their business strategy and how does that align to yours? Are they in it for the long haul or are they fattening up in the hope of acquisition?

Size of network – The size of the vendor’s supplier network is one indication of there strength. A large network indicates faith in their solution but it also likely to support a rapid uptake amongst your suppliers.

Geographic reach – Some vendors are highly localized. That could be a strength or a weakness depending on the geographical scope of your project. If you only operate in Belgium, its likely that a Belgian vendor will understand your market better than a US based partner. If you are in Mexico, you may have no choice because the Mexican authorities insist on a local presence.

Relevance to you – Size and geographical reach are important factors but only in so far as they are relevant to you. A very small network may put off a large global orgnisation but if they specialize in your industry and have pre-existing relationships with most of your suppliers, they may be the perfect partner

Interoperability – This can get complicated. There are vendors that operate closed networks and vendors who have open networks. There are vendors that do both and, bizarrely, vendors that argue there’s no difference. Understand whether potential partners embrace interoperability but don’t be dogmatic about it. You may like interoperability but if a supplier with a closed network can deliver better, quicker and cheaper, don’t close the door on them as a matter of principle.

Implementation considerations – Understand what support will be given, not just from a technical point of view but from a supplier on-board point of view too. You may have a team of people ready to take this work on but they’re unlikely to have the experience that the vendors do. Support from your partner will be invaluable.

Meet the team – Don’t take their word for it. Eyeball the team that is offering to take you on the e-invoicin journey and insist on a few face to face reference visits with customers like you.

Functionality – Ask for detailed information about the e-invoicing solution in terms of its functionality. Avoid open questions as much as possible and try to ask specific questions related to your specific circumstances

Integration with finance systems – Ensure that you are confident about integration issues. This isn’t just about getting a tick in the box for your particular flavor of ERP, you need to understand in detail how the solution will integrate with your business processes and workflow.

Costs – This is very complex so go into the discussions with your eyes open. Educate yourself on the various cost models and askfor a detailed description of the cost model. Are there transaction costs? Are they fixed or related to the value of the transaction? Who pays? Supplier, buyer or both. Are there network membership fees?Are the costs incurred up front on a use it or lose it basis or are they calculated in arears based on actual ttransactions? What about implementation, support and customizations?

Should you employ an expert?

There are 3 approaches. You can use your own people and learn on the job. You won’t get things wrong with this approach but you may not get things right quite as quickly.

Secondly, you can employ a team of consultants. For very large organizations with deep pockets this could be a good approach to decrease time to benefit but it is expensive and what you gain in reaching benefits earlier is lost because of the costs. (It does however give you someone to blame if things go wrong!)

There third way is a hybrid approach. Use your own resources but get an expert to validate what you do. By expert we mean someone with deep, current, hands on knowledge – not theoretical knowledge or aged experience. A ‘been there, done that, got the T-shirt twice’ expert. The day rate is likely to be higher than the consultants but a few expensive days of expert validation costs much less than a team of consultants for a few months and could deliver a much higher speed to benefit.